Mid-tier or second cities, loosely defined as cities with under a million people that aren’t regional centers of commerce, have caught the eye of Millennials, Gen z-ers and developers over the last decade. Cities, such as Fort Worth, Colorado Springs, Sacramento, and Jacksonville, have experienced a noticeable uptick in growth in the last five years due to lower cost of living, more affordable housing, an easier commute, and a more approachable feel.
Millennials and younger generations are moving to second cities over primary markets, and they’re opting to purchase single-family homes in the suburbs rather than pay the premium for renting or buying in the city.
The second city suburbs present an opportunity for home builders to thrive in an otherwise tough land acquisition and labor market. Here’s why:
More Millennials and younger generations, the target demographic for many residential home builders, are moving to second cities. They want and can afford to buy homes in these markets. Smart home builders are creating the supply to meet their demands. The suburbs are cool again, and the second city suburbs have the land and the demand to make the residential home building business hot.